Parties clash on tackling deficit

The main parties have clashed over how to tackle Britain's record £163 billion deficit.

The attacks came after the influential Institute for Fiscal Studies said that all three main parties had failed to come clean about the scale of the spending cuts that would be necessary after the General Election.

In a campaign speech in Edinburgh, Chancellor Alistair Darling attacked the "flawed" judgment of Mr Osborne and Tory leader David Cameron - saying they had consistently made the wrong calls on the international financial crisis.

"At every stage, they have misunderstood the causes of the crisis, underestimated the need for action, and opposed the measures to limit its impact," he said. "In opposition, this is embarrassing. In Government, it would be disastrous. Not for them, but for everyone who lives in this country."

Earlier, Foreign Secretary David Miliband accused the Conservatives of "economic illiteracy" over their suggestion Britain could be facing a Greek-style crisis.

However, in a speech to the Institute of Directors' (IoD) annual convention in London, Mr Osborne insisted the comparison was valid unless the deficit was dealt with. "If anyone doubts the dangers that face our country if we do not, they should look at what is happening today in Greece and in Portugal," he said.

He said the Prime Minister had stood in the way of efforts to tackle the deficit, refusing even to hold a spending review before the election.

"Gordon Brown has created an economic climate where the budget deficit is the biggest threat to our economy," he said. "He has created a fiscal climate where nobody except the Treasury has the information required to set out the full extent of the spending choices ahead. He has created a political climate where anyone talking honestly and sensibly about what needs to be done is falsely accused of making deep cuts to vital services."

Meanwhile Liberal Democrat treasury spokesman Vince Cable, who has previously attacked some business leaders for backing Tory plans to cut spending this year to fund a cut in national insurance, hit out again at wealthy "non doms" who tried to interfere in the political process.

"I have no time for billionaire tax dodgers who step off the plane from their tax havens into the country where they make their money and have the effrontery to tell us how to vote and how to run our tax policies," he told the IoD. "If some of them came onshore and paid their taxes it would make a useful dent in the budget deficit."